Rise of the MBA

On the South Campus of Shenzhen’s High-Tech Park, the writing is on the walls. Signage, in both ornate Chinese calligraphy and boldface Arial font proclaims: Tsinghua University, Beijing University and Hong Kong University of Science and Technology. The latter two have full-fledged business schools operating on campus. And while they initially drew candidates almost solely from traditional business and finance sectors, their programs are now rapidly filling up with Tech Park professionals.

Through hard work, competitive pricing and government support, Shenzhen’s Tech Park, once a sleepy mangrove coastline of fishermen, smugglers and border jumpers, is now the young metropolis’ education and technology hub.

As local telecom performers like Huawei and ZTE are increasingly formidable on the global stage, IT professionals are responding in kind, seeking the kind of competitive advantage associated with an MBA degree.

IT sector in need

Beijing University’s Guanghua School of Management has kept a close eye on the trend.

“At that time, almost all of our students were in finance. But since 2004, we’ve seen a noticeable increase in IT sector candidates. They now figure about one-third of our yearly enrollment,” Shenzhen Graduate School Director Zhang Guoliang said of their 60-80 student graduating classes.

The IT sector usually comprises individuals strong in the math-and-science, number-crunching “hard skills” that the industry traditionally demands. Employees in the sector often lack the managerial, communication and presentation “soft skills” required to advance into upper management. Due to the nature of the job, IT employees generally have less opportunity to interact with people in other industries, resulting in weaker networks.

“There are two reasons why we send staff to do a MBA. One is because we need employees who can function on the international, global plane. The other reason is because we want to enable them to interact with managers from other firms, ” Shen Li, a marketing and sales director at IT powerhouse ZTE, explained. For the past decade, Li had seen a strong need to send ZTE staff to get a MBA.

ZTE places their staff to become MBA candidates based on how compatible their employees’ initiatives are with the company’s long-term strategies. A paid-for degree comes with a five-year contractual agreement and financial support from the company.

“In most cases, employees themselves apply. However, in the case of certain strong managers whom we hope to retain and promote, we will sometimes strongly request and encourage them to do their MBA,” Li said.

In recent years, China’s IT field has matured very fast, and the demand for managerial talent has grown as well.

“At a certain level, most of them reach some kind of bottleneck where it becomes difficult to advance. This is when they start thinking about an MBA,” Grace Liang, senior representative of Hong Kong University of Science and Technology’s (HKUST) Shenzhen MBA Program said.

Thinking MBA, or not

After advancing for three years through his IT company’s marketing department, 28 year-old Hebei native Liu Yunlong is considering an MBA and would do it if it boosted his career.

“I want to become an account executive. Most of my coworkers also feel this way. It’s like charging our batteries,” Liu said.

Like many IT companies nationwide, Liu’s firm encourages some of its employees to go to business school and often picks up the tab. “That’s the only way I’d do it. Otherwise, it’s way too expensive.”said Liu continued.

Rather than emerge from school two years behind industry standards, without a fixed position, most candidates choose to study part-time while holding down their post. Liu wouldn’t have it any other way, although the part-time MBA program was a challenge.

“I’ll be able to apply what I’m learning directly to my work. My on-the-job performance may suffer a bit, due to the course load, but my boss should understand,” Liu said.

But not all techies are singing B-school’s praises. Lu Weiqiu, a marketing specialist at ZTE said he is not interested in obtaining an MBA.

“Most people who get MBA degrees hope to advance along a management track within their company. But after completing your studies, you’re chained to that company for years to come,” Lu said.

Lu already has a master’s degree and gained experience running his own firm before the IT bubble burst. From experience, he believes that what Chinese entrepreneurs need is practical experience.

Lu’s reasoning highlights two of the most often cited weaknesses of China’s MBA programs: the lack of emphasis on real-world training and entrepreneurship, which creates a critical divide in the young and burgeoning IT field where, despite post-IT bubble fallout, startups still abound.

Entrepreneur programs

MBA programs at Berkeley and Stanford, responded quickly to the IT boom in the early 1990s, by quickly embraced entrepreneurship and tailoring their curriculum to focus on small business startups, in venture capital and finance.

Associate Dean at CEIBS Professor Lydia Price finds that entrepreneurial programs in Chinese MBA schools are still relatively new to both the executive education industry and MBA students.

“Our students really aren’t ready for it. They need a more basic understanding of what it means to be an entrepreneur, both at the new venture level as well as the more general managerial level,” Pri ce said.

Yet the demand in China for MBA education with a focus on entrepreneurship shows no sign of abating
CEIBS, like many of China’s MBA programs, are beginning to focus on the “nuts and bolts” of a general MBA while offering special electives to deal with new venture development and the financing and marketing of new ventures. These trends are appearing across the board, not only for entrepreneurship but also in the face of a rising demand for more specialized MBA programs.

While business schools overseas are tending towards specialization, China’s young and relatively inexperienced MBA programs are still finding their footing. “This is a trial period. MBA programs are still very new in China. Most are more focused on how to maintain their program’s quality while managing student’s expectations. Specialization will take time,” Liang said.

Many B-schools on the mainland like Beijing Guanghua average around 60-80 students per class, and conscientiously offer specialized programs for their students. Located within the Tech Park, Beijing Guanghua’s Shenzhen campus tries to recruit professors from the IT field and introduce IT case studies when possible.

“Our curriculum is still quite general but if we have lots of students coming from the IT field in a certain class, we try to cater to them,” Zhang said.

MBA growth

China first authorized MBA programs in 1991, permitting nine universities to offer the degree. Currently, that number has to grown over 200.

“With this kind of growth, you can imagine that specialization is already happening. I’m sure it will flourish here, just as specialization is a key feature of the more developed MBA markets,” John Van Fleet at Jiao Tong University’s Antai College of Economics and Management said.

The mushrooming growth in MBA programs is undoubtedly enabling the field to absorb more candidates. However, without an existing national rating system, or international accreditation status for new MBA programs in China, it can be difficult to differentiate which programs are the real deal, and which are simply selling degrees.

In addition to entrepreneurship and specialization, there are other new challenges facing China’s burgeoning MBA programs. For the significantly cheaper and numerous local, Chinese-language MBA programs, it’s a struggle to establish legitimacy. And in the face of rising demand, it is still extremely difficult for local schools to secure the faculty needed to offer English-language programs, Liang at HKUST continued.

As China becomes more influential at global level, English-language MBA programs will become a necessity.
“We are a global village, and English is the language of choice,” Liang said.

Of the numerous changes in the executive education industry in China, one of the most evident may be a separating of the grain from the chaff.

“Within the next 10 years or so, it should become clear which programs have real staying power and which ones will get left behind,” Liang said.

Value of a MBA

While local Chinese-language MBA programs establish their footing on the executive education market, the problem of retaining experienced and qualified staff raises questions of poor quality training for its students and puts forth the question: Is the China MBA worth its value?

Upon closer examination, China B-schools represent value for money, the CEIBS MBA program and the Fudan and Washington University’s joint EMBA program being good examples. The key is to assess what the curriculum, staff and student body have to offer before applying.

Whether getting a MBA in China is company-sponsored or self-paid, the upgraded skill-sets and expanded network that comes with a MBA is a compelling lure.

With the success of China’s efforts in developing its IT sector, the demand for MBA-qualified staff in the IT and service sectors will continue to grow. Currently, demand for MBA-trained management in these sectors outstrips supply. In years to come, it will be interesting to see how China MBA programs progress to fulfill that need.

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